Joe Kiani said Masimo Corp. has “about $8 million” to spend now that Congress and the president agreed at the end of last year on a bill that included a two-year moratorium on a 2.3% medical device tax.
That’s about what the levy cost the Irvine-based medical device maker in each of the past two years, said Kiani, who is chairman and chief executive.
“We cancelled one R&D project when the tax went in because we didn’t have the funds,” he said. “It didn’t hurt Masimo’s trajectory when we put it aside, but we couldn’t look into anything new.”
Now Masimo can “go back and do one or two ‘moon-shot’ projects that are risky but with huge potential.”
Decisions aren’t final, but some of the research would involve a “top-three killer” in the U.S. and internationally.
Masimo also wants to open a distribution center and hire customer service employees “to better serve our customers and get our products to them faster.”
The company could choose Indiana or Georgia for the new facility to complement existing distribution points in Irvine and New Hampshire.
Kiani said plans are tentative and “will take a while to ramp up” if Masimo makes the moves but that they wouldn’t have been considered without the device tax suspension.
He’s a past chairman of the Washington, D.C.-based Medical Device Manufacturers Association and still sits on its board.
Mark Leahey, president and chief executive of the industry trade group, said the tax has had “an adverse impact on R&D and job creation. Short-term R&D projects that have been on hold are (now) more likely to move forward.”
Alphaeon Buys Again
Irvine-based Alphaeon Corp. bought Rocol SA in Barranquilla, Colombia, on undisclosed terms.
Alphaeon works with doctors who provide products and services not covered by insurance—known as “lifestyle medicine”—and hosts a social media network where doctors can review and rate products, a sort of Yelp for products and procedures.
Rocol sells medical equipment for ophthalmology, dermatology, oncology, aesthetic and surgical needs in Latin America, Brazil and the Caribbean.
Alphaeon Chief Executive Robert Grant said the buy “expand(s) its presence in these key emerging markets.”
The acquisition was announced one day after Alphaeon closed on its $59 million acquisition of Orlando, Fla.-based Lensar Inc., which makes laser devices used in cataract surgery.
Alphaeon in November said it would buy Temple, Texas-based Integrity Digital Solutions, a software maker for the ophthalmology and optometry fields.
Alphaeon is a portfolio company of Newport Beach-based private equity investor Strathspey Crown Holdings LLC, which in September said it would buy Imex Clinic SL, a Valencia, Spain distributor of ophthalmic, urology, cardiology, aesthetics and hospital engineering equipment.
Alphaeon last January landed $27 million in Series A funding led by Longitude Capital LLC in Menlo Park, and in November it added $80 million in Series B funding led by Sailing Capital in Hong Kong.
St. Joseph Division Head Named
St. Joseph Health System in Irvine named Annette Walker the division president of St. Joseph Health.
The system announced in November its long-awaited merger with Providence Health & Services in Renton, Wash.
Walker takes the same role as St. Joseph Health president and Chief Executive Deborah Proctor, with oversight of operations in California, Texas and New Mexico, which will be a division of the merged Providence St. Joseph Health.
The combination of the systems is expected to close midyear, and at that point Proctor plans to leave her post.
Rod Hochman will be president and chief executive of the newly merged organization.
Walker will report to him. She had been executive vice president of strategic services.
“She is well regarded by our leadership team and physicians for bringing people together in a manner reflective of the values of the Sisters of St. Joseph of Orange,” Proctor said in a memo to her executive team.
“She has been deeply involved in efforts to educate our teams on Catholic social teachings and has been personally involved in many of our formation programs.”
Bits & Pieces
DNA testing products company CombiMatrix Corp. in Irvine said it got conditional approval from the New York State Department of Health to market its CombiPGS genetic screening test, and it now markets all of its tests in the state. … Laguna Hills-based glaucoma stent maker Glaukos Corp. had a “buy” rating on its shares reaffirmed by Cantor Fitzgerald, which set a price target of $37 on the stock.
